The concept of constructing a railroad in the United States was first conceived by Colonel John Stevens, in 1812. He described his theories in a collection of works called "Documents tending to prove the superior advantages of railways and steam carriages over canal navigation." The earliest railroads constructed were horse drawn cars running on tracks, used for transporting freight. The first to be chartered and built was the Granite Railway of Massachusetts, which ran approximately three miles (1826). The first regular carrier of passengers and freight was the Baltimore and Ohio railroad, completed on February 28, 1827. It was not until Christmas Day, 1830, when the South Carolina Canal and Railroad Company completed the first mechanical passenger train, that the modern railroad industry was born. This industry would have a profound effect on the nation in the coming decades, often determining how an individual lived his life.

By 1835, dozens of local railroad networks had been put into place. Each one of these tracks went no more than a few miles, but the potential for this mode of transportation was finally being realized. With every passing year, the number of these railway systems grew exponentially. By 1850, over 9,000 miles of track had been lain. Along with the proliferation of railroads came increased standardization of the field. An ideal locomotive was developed which served as the model for all subsequent trains. Various companies began to cooperate with one another, to both maximize profits and minimize expenditures.

This interaction of various companies initiated the trend of conglomeration which would continue through the rest of the Nineteenth Century. In 1850, the New York Central Railroad Company was formed by the merging of a dozen small railroads between the Hudson River and Buffalo. Single companies had begun to extend their railway systems outside of the local domain. Between 1851 and 1857, the federal government issued land grants to Illinois to construct the Illinois Central railroad. The government set a precedent with this action, and fostered the growth of one of the largest companies in the nation.

With the onset of the Civil War, production of new railroads fell dramatically. At the same time, however, usage of this mode of transportation increased significantly. For example, the Battle of Bull Run was won by a group of reinforcements shuttled in on a railroad car. By the conclusion of the war, the need for an even more diverse extension of railways was extremely apparent.

Soon after the war, the first transcontinental railroad was constructed. The Union Pacific Railroad company started building from the east, while the Central Pacific began from the west. The two companies met at Promontory Point, Utah, on May 10, 1869. As they drove the Golden Spike uniting the two tracks, a new age was born. Slowly, the small railroad companies would die out or be absorbed by large businesses.

Several more transcontinental railroads were built before the end of the century, all by large corporations. Every decade brought increased standardization. In addition, labor unions were developed to protect the rights of the workers. As companies grew larger, they began to take over other related fields. Soon, large trusts were formed that controlled many aspects of both the economy and society. As more and more areas became controlled by the octopus of the railroad industry, it became apparent that regulation was imperative.